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Crises in the Photo Industry (1)

Between the bankruptcy of the former Polaroid Corporation and the ongoing dissolution thereof and distribution of its assets, the threat of bankruptcy for the U.S.-based Eastman Kodak Co., and the tangled corruption scandal engulfing Japan’s Olympus Corporation, the photo industry is undergoing a shake-up unmatched in its history. Santa, it would seem, has had only lumps of coal for that industry’s stockings these past few years.

I’ve covered at length the ignominious end of the former Polaroid Corporation and the breakup of its unique collection of photographs. The tribulations of Kodak and Olympus impinge less directly and severely on the field of creative photography, where I concentrate my attention as a critic and journalist. Yet, like the collapse of Polaroid, they too seem to signify the end of an era in which major-league companies identified so strongly with photography constituted an industry from which no one anticipated anything but ongoing strength and steady growth, and in some symbolic way an end to photography as we knew it not so long ago, whimpering instead of banging.

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Due to the incompetence of its hidebound executives, from the top on down, Kodak came late — arguably way too late — to the digital market, despite the fact that it was a Kodak engineer, Steve Sasson, who invented the digital camera in 1975. As a result, what was once — in my lifetime! — the undisputed dominant global provider of photo products to the consumer-end market in analog photography has become a lowly bit player in the digital consumer-end market: a year ago, Standard & Poor’s removed Kodak from its S&P 500 index, and in 2011 Kodak had only a 3 percent share of the global market for color inkjet printers (beaten out decisively by HP, Epson, and Canon, and even edged out by Brother) and a mere 9 percent of the digital still camera market, its ass whupped in that category by Nikon, Canon, and Sony. (For my previous comments on this decline and its source in Kodak’s corporate culture, click here.)

Now, with its stock having plunged dramatically, and desperate to raise cash, Kodak is looking to sell off assets — including a portfolio of some 1,100 digital patents. One could argue that, given the pathetic market share that said patents have achieved for the company, they’ve hardly proved themselves worth retaining. On the other hand, selling off those patents would put Kodak in the position of starting from scratch in the digital realm, facing a bunch of well-established competitors.

Might be for the best, if Big Yellow can simultaneously jettison the executive deadwood whose failure of vision has brought the company to this sorry state. Dump the suits, say I, and bring in a bunch of innovators, especially in the Research & Development division.

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As I write this, on December 24, Japanese authorities have just raided Olympus headquarters in Tokyo and the homes of past and present Olympus top executives who allegedly profiteered off the company through a series of scandalous, highly illegal maneuvers stretching over decades, covering up losses of USD $1.7 billion. (Click here for Hiroko Tabuchi’s New York Times report.) Lo, how the mighty have fallen — and the share price of their corporate stock along with them.

Fascinating that the vaunted concept of “face,” legendarily paramount in the Japanese psyche, does not have any inhibitory effect on the venality and outright thievery rampant in that country’s governmental and corporate circles. The photo-op moment of current executives bowing briefly in apology at a December 15 press conference hardly makes up for decades of what the Kyodo News describes as “accounting fraud involving a coverup of colossal losses” — the largest “tobashi” scandal in Japan’s corporate history. (In a “tobashi scheme” a client’s losses are hidden by an investment firm by shifting them between the portfolios of other actual or fictional clients. Note that the Japanese actually have a name, like “Ponzi scheme” in the west, for what’s obviously a frequent practice.)

Olympus Corp. President Shuichi Takayama bows in apology during a press conference in Tokyo Tuesday, Nov. 8, 2011. Photo by Mainichi Shimbun, Toyokazu Tsumura, as published at Seattlepi.com

Certainly that deferential gesture doesn’t signify contrition to anyone outside the land of the rising sun, where taking a public bow instead symbolizes acknowledging congratulations for a job well done — which, by the Gordon Gekko standards of modern-day Japanese business, is way closer to the truth. (According to an earlier report by Tabuchi, “a third-party investigative panel . . . called the Olympus management ‘rotten to the core’ and urged the entire board to go.”)

Nor can anyone take much comfort from the unprecedented but brief apology from Olympus president and CEO Shuichi Takayama on the Olympus homepage, which reads, in part, “We again extend our deepest apologies to Olympus shareholders, customers, business partners and all other stakeholders and others for the significant trouble we have caused them.” (This is a revised version of the earlier apology, in which that paragraph read, “The company would like to take this opportunity to sincerely offer our deepest apologies to its stakeholders, including our shareholders, customers, trading partners and other relevant parties for all inconvenience caused, including a fall in share price.” Inconvenience . . . right. Takayama, of course, having joined the Company in April 1970, was at the very center of that “rotten core.”)

Adding further to the national dishonor, the whistleblower here was a Brit, not a Japanese: former chief executive Michael C. Woodford. I remind you that Takayama is a bald-faced liar who, as late as November 11, “stood by the company’s original claim that it fired the 30-year Olympus veteran [Woodford] because he was a ‘high-handed’ manager who did not understand Japanese culture.” (See Jonathan Soble’s Nov. 11 report, “Olympus takes traditional route to apology,” in the Financial Times.) To the contrary, it has become painfully obvious that Woodford understood Japanese culture — especially its ethically challenged corporate culture — all too well, and that the “high-handed” ones here are none other than Takayama and his co-conspirators, who have yet to show the decency required to apologize to Woodford for this slur.

The fact that no Japanese company executive had the courage to denounce this massive scam, all instead colluding to cover it up for almost 20 years, and that it took a westerner to bring their malfeasance to light, surely amplifies the shame that these disgraced looters have brought onto their company, and onto Japan as a whole. (Wikipedia has a thorough and extensive account of the whole mess.)

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Both of these tsunamis were breaking during PDN PhotoPlus, the annual industry expo held at the Jacob K. Javits Convention Center in New York City each October. I attended for a day this fall, spending half my time there doing portfolio reviews for Photo District News and the Palm Springs Photo Festival, the other half strolling the aisles of the expo.

A. D. Coleman at PhotoPlus, NY, 2011.

I’ve written previously about my reasons for attending tech expos generally, and this one in particular, in my roles as a critic, historian, and theorist of photography and the new digital media. In addition to getting a sense of where the technology is heading, and thus how it may affect photographers’ practice, attendance also provides an opportunity to stick a wet finger into the wind of the photo industry itself. In a sense, as PhotoPlus goes, so goes the medium.

I have manners enough that I didn’t put the expo reps of either Kodak or Olympus on the spot by asking them to explain or comment on the doings of their upper echelons or these looming disasters, which would only have resulted in embarrassed, sickly smiles and demurrers. Nor, from chatting with some colleagues, did it seem that these upheavals were much on the minds of those attending. Yet PDN PhotoPlus International Conference + Expo — its full title — seems smaller and less relevant each year, as I noted in an earlier report on this past October’s version. The cultural move to digital imaging has left just about everything labeled “photo” in the dust.

I expect this attrition to continue, with the likely result that PhotoPlus will move to another venue, less spectacular but also less expensive. The prohibitive cost for a booth at the Javits Center excludes most of the microbrew/boutique companies that serve the analog photography world — like Sprint Systems of Photography, this blog’s sponsor. The closest thing to an expo for those goods and services is the annual Society for Photographic Education national conference, which offers an Exhibits Fair as part of the menu. But the limited hours of this expo, in conjunction with the one-off conference locations and the competing three-right circus of conference programming, eliminates this as a destination expo for people in the field, however well it may serve the photo teachers and students who form the majority of conference attendees.

A. D. Coleman at PhotoPlus, NY, 2011.

So there’s a niche analog-photo industry, and a niche digital-imaging industry serving the creative/fine-art corner of the same niche market. They need a full-fledged dedicated expo of their own, and someone will get smart and create such an event for that constituency sometime soon. You read it here first.

Meanwhile, I learn less and less from each passing PhotoPlus, while my feet and back get tired more quickly each time. The most fun I had this year came when I stopped at the Kingdom Photo Booth display. This company offers arcade-style digital-photo booths for purchase (you could install one in a fixed location, or rent it out for weddings and other events). It includes on-the-spot output as well as post-event online options for creating albums, etc.

They’re not the only company offering such a device; see, for example, the Magnolia Photo Booth Co.‘s roughly equivalent machine. Both deliver genuine photo prints on photo paper; and, having tried both, I don’t see much difference. But Kingdom was there at PhotoPlus, Magnolia was not, and I couldn’t resist making a few myself. I’ll confess to missing the sharp smell of fixer, but the fun of making self-portraits this way hasn’t changed.